BUFFALO, N.Y. - Bak USA announced today that it will discontinue operations, effective immediately.
The company informed its 77 employees today of the decision.
Before Bak USA even opened its global headquarters in the old Sheehan Hospital on Michigan Avenue in Buffalo, it was one of the companies Governor Andrew Cuomo highlighted as bringing new jobs to Western New York as part of the Start-Up NY program.
As of today, those jobs are gone.
Tablet and laptop maker Bak USA opened in Buffalo in 2015 with 15 employees. It was one of the first companies to be approved for Governor Cuomo's Start-Up NY tax-free zones. In June, it cut its staff by almost ten-percent. In September, it confirmed shareholders reached an agreement, in principle, for a management buyout of the firm. The largest shareholder, Former Buffalo Sabres Owner Tom Golisano, told 2 On Your Side that rumors the company was in dire financial straits were false.
Thursday, Bak USA announced it is discontinuing operations effective immediately impacting 77 employees. CEO JP Bak went on to say, "... the business did not reach the point of profitability necessary to sustain itself. The additional, unanticipated expenses associated with the tariffs imposed by the White House were a deciding factor in our ultimate decision to close."
2 On Your Side requested an on-camera interview with Bak USA and did not get a response.
We did catch up with Buffalo's mayor Thursday for his reaction.
"The components that they use in the manufacturer of their tablets come from China. And because of these tariffs that have been imposed, 77 people are going to be out of work," said Buffalo Mayor Byron Brown.
Fred Floss, Chair of the Department of Economics and Finance at SUNY Buffalo State, told 2 On Your Side that since about 90-percent of Bak USA’s parts should be hit by tariffs, that would mean about a 20-percent increase in costs. Floss says Bak USA would also see prices go up if other countries retaliated.
Bak USA was unique in that one person built each device from start to finish. In 2017, 2 On Your Side asked JP Bak why choose Buffalo?
"Buffalo has two elements that we could plug into. One, highly, highly qualified academic, educated people from the University at Buffalo. And, not very highly educated but great workforce that simply just didn't get the chance in life," said Bak.
A WARN notice hasn't shown up on the state's Department of Labor website yet. 2 On Your Side heard from Allsafe Technologies in Amherst on Thursday night which says it is reaching out to Bak USA to see if it could hire some of the 77 laid-off employees.
Below is a statement from Bask USA Chairman J.P. Bak:
“It is with great sadness that I announce today that Bak USA will close its doors. My family started this business nearly four years ago with a bold vision: to empower American students and workers by producing computers in the U.S. Through the innovation and hard work of our talented team, we achieved more than we dreamed. Regrettably, the economic pressures on our young company have become too great to withstand.
Employees were notified of the decision today.
Beginning today, we will reach out to customers and partners to notify them of this sad news. The company will reimburse customers for any unfulfilled purchase orders.
While we are beyond proud of Bak USA’s many successes, the business did not reach the point of profitability necessary to sustain itself. The additional, unanticipated expenses associated with the tariffs imposed by the White House were a deciding factor in our ultimate decision to close.
I’d like to express my deepest gratitude to our employees, our partners, and the Buffalo community for supporting us over the last four years.”
The company will offer no further comment.